Budget approval paves way for banking, fiscal reforms: Admn
Our Correspondent
Jammu, August 9
Two days after the Budget of J&K was passed by Parliament, the UT administration has stated that it will pave way for fiscal and banking reforms.
Parliament approved the budget of J&K for 2024-25 with provision of Rs 1,18,390 crore. While Lok Sabha passed the Appropriation Bill on Tuesday, Rajya Sabha approved it on Wednesday. This budget provides for revenue expenditure of Rs 81,486 crore and capital expenditure of Rs 36,904 crore.
Special financial package of ~17,000 cr
Considering the challenges faced as also the reforms undertaken by the UT government, the Central Government has approved the special financial support of ~17,000 crore for J&K. As a result of this ~17,000 crore of special package, the fiscal deficit to GDP ratio of J&K will reduce to 3% in the FY 2024-25
“This outlay surpasses the pre-actuals of the financial year 2023-24 by Rs 30,889 crore. This jump has been possible thanks to the special financial support agreed by the central government. This package was necessitated due to the persistent under recoveries in power sector due to high ATC losses and low tariff in J&K” an official spokesperson said.
The UT government had incurred off-budget borrowings of about Rs 28,000 crore to clear the power sector dues which had piled up over the last several years.
To address these off-budget borrowings, Finance Department had started exercise since the last one year to bring them on the budget books. “A detailed analysis of the UT’s fiscal situation was carried out to address the legacy challenges which include high staff strength, low revenue base, and high debt load. In this direction, the UT government increased its own revenues to over Rs 20,362 crore in the year 2023-24 through improved GST return compliance, dealer registration, and transparent excise auctions” the spokesperson said.
He said the UT government's efforts to undertake metering and improve collection efficiency enhanced the non-tax revenues from Rs 5,148 crore in 2022-23 to Rs 6,500 crore in 2023-24. Administrative departments also intensified efforts and stepped up receipt of CSS funds from Rs 6,400 crore in 2022-23 to Rs 10,300 crore in 2023-24, he said.
During 2023-24, the UT government also stringently enforced borrowing limits and curtailed the culture of overdraft. “With close monitoring of public debt, the UT government was successful in tapering down the off-budget borrowings. The government also restrained the non-priority expenditure through austerity measures and biometric verification of beneficiaries. For the first time in 77 years, UT contributed to the contingency funds created by the RBI,” the official said.
Considering the challenges faced as also the reforms undertaken by the UT government, the Central Government has approved the special financial support of Rs 17,000 crore for J&K. As a result of this Rs. 17,000 crore of special package, the fiscal deficit to GDP ratio of J&K will reduce to 3.0% in the financial year 2024-25.
The Union Government will provide for the salary, pension and other costs of J&K police for which an allocation of Rs 12,000 crore has been made in the union budget. In addition, a special grant of Rs 5,000 crore is being provided to Jammu and Kashmir.
